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Thursday, September 25, 2014

How Alibaba's Jack Ma Became the Richest Man in China



English teacher and Internet entrepreneur Jack Ma founded Alibaba 15 years ago in his tiny apartment in Hanzhou, China. On Friday, Ma became the richest man in China on the heels of the biggest IPO in U.S. and possibly world history.
With a market cap of $231 billion, the online retailer is nearly as valuable as Wal-Mart and bigger than Amazon and eBay combined.
And this is just the beginning. Alibaba plans to expand aggressively in America and Europe and has already invested nearly $1 billion in a host of U.S.-based startups, including Uber, Lyft, ShopRunner, Fanatics, Tango and Kabam.    
Every current and aspiring entrepreneur and business leader should learn from how a Chinese English teacher turned a vision, a group of friends and $60,000 into untold riches and the world's most valuable Internet commerce company. It will no doubt be studied in business schools for generations.
Start here, go anywhere. Recognizing the importance of English, young Ma would ride his bike to a nearby hotel and guide foreigners around the city just to learn and practice the language. His passion for entrepreneurship in many ways parallels Masayoshi Son who grew up poor, followed his dream to Silicon Valley and graduated from U.C. Berkeley before founding Softbank. As chairman of Softbank and Sprint, Son is now the richest man in Japan.
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He had vision … and he had help.
 Ma saw the Internet’s enormous potential to bridge businesses across China’s huge population early on. So he and his wife brought 17 friends together and pooled $60,000 to start the company. That formed the basis for the company’s dynamic partnership structure and unique culture designed to drive collaboration, diminish bureaucracy and promote accountability for long-term growth.   
Go big or go home. Even if crowdfunding existed when Alibaba was founded, I doubt if Ma would have gone that route. He’s simply not a “dip your toe in the water” kind of guy. Instead he and his friends went all in, raising a $5 million angel round, $20 million from Softbank in 2000, $1 billion from Yahoo five years later, and $1.6 billion from Silver Lake Partners and DST Global in 2011. That’s how you make it big.   
Big problems lead to big opportunities. China’s lack of brick and mortar infrastructure has always been an insurmountable hurdle for the enormous nation’s small business merchants. Alibaba solved that and now accounts for 80% of the country’s ecommerce – a whopping $248 billion last year and more than twice that of Amazon.

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Innovation comes from unique individuals who think and act differently. Everyone talks about changing the world and making tons of money these days, but those who actually do it are exceptional individuals with breakthrough ideas, uncommon vision and a passion to do great work. Disruptive innovation comes from people who break from the status quo and carve their own path.
Stand on the shoulders of giants ... but learn from their mistakes. Like Amazon and eBay, Alibaba is an Internet commerce company, but that’s where the similarity ends. Alibaba does not actually hold inventory or sell goods. It’s a middleman that collects annual fees and commissions from larger merchants and advertising fees from smaller ones. The result is one of the most scalable and profitable business models on Earth.
What’s in a name? Less than you think. Apple. Facebook. Google. Microsoft. Uber. One Kings Lane. Fanatics. Starbucks. Whole Foods. What do the names and brands of all these companies have in common? Absolutely nothing. Some are conjunctions or made-up words. Others are common words or phrases. There’s even a fruit. It’s what your business does for customers that counts … not your name or personal brand.
Jack Ma was sitting in a San Francisco coffee shop when he thought of how Ali Baba overheard the secret password of The 40 Thieves -- “open sesame” -- and unlocked untold riches. It resonated with his vision of unlocking the potential of China’s small and midsized merchants. Now you know the secret of how he accomplished his dream.  
Source: http://www.entrepreneur.com/article/237692

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Friday, September 19, 2014

5 Steps to Validate Your Business Idea Quickly



Do you have a business idea? Of course you do. Why else would you be reading this article?
If you are like most aspiring entrepreneurs, however, the problem comes in the immediate stage following your "ah-ha" moment, when the idea lingers as a passing thought or a series of sticky notes in a journal until the enthusiasm passes. Then, a few months later, you see your idea on the shelf at a local retail store or in the iTunes App Store.
We have all been there.
Ideas stall because the process of getting them to market can seem overwhelming. In reality, if you validate your idea -- prove it has worth beyond the bar napkin on which it is scribbled -- the process thereafter actually gets much easier.
Here are few things to consider the next time you have your next big business idea.
1. Look for it. When I hear that someone has the next big business idea, I pull out my iPhone and within minutes can often find an existing product or service with a search on Google or YouTube. Before you even get wrapped up in an idea, save yourself the time and do a thorough search to find out if it already exists.
If you find it does, do not give up on your inspiration too hastily. Perhaps there are ways to improve on the existing product? Can you offer value to the business already producing it? Could the market be satisfied better? If you answered "yes," move to the next step.
2. Seek feedback. Talk to others about your idea, especially people you trust. At this stage, what you want is brutally honest feedback. Entrepreneurs have a tendency to get stuck in "idea lock," when they are hellbent that their idea is a winner, regardless of what others say. If you are the only person who truly thinks the idea is good, then it is time to reassess.
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3. Build an MVP. If your idea has support, then consider developing an MVP, or minimum viable product, to determine if it is a product you and others would really use. Channel your inner "MacGyver" and build a working prototype, or look to a resource that has the ability to leverage newer technologies, such as 3D printing, to help.
If you have a technology idea, such as a smartphone app, look to crowdsourcing or a StartupWeekend event to find the assistance you need. Once you have the MVP, use and test it and have others test it as well. If it turns out to be a product that you and your friends would never really use, scrap the idea.
4. Start building your identity. If your testing goes well and you feel that you might have a winning idea, start building a brand around it now. In today's fast moving and innovating business environment, an idea that is validated today may be knocked off or even obsolete tomorrow, so do not linger.
More importantly, unless your idea is founded in a groundbreaking and proprietary new technology, more than likely it is already being conceived by someone else already. It is off to the races.
At this point, some fear that "exposing" their idea may lead to someone stealing it. This is a completely valid concern, but these days, you should go on the assumption that someone will steal it or develop a newer and better iteration eventually, so the key to success will be to be first to market.
Also, while patenting is a great way to protect your idea, it is also a very expensive process that is not guaranteed to protect you. If you have the resources, engage a patent attorney and pursue the protection, but if you do not, then turn your focus on building your brand.
Start by choosing a great name and securing the website domain to create, at a minimum, a sharp business landing page. Next, secure your business name with every social-media site you can. Even if you do not use them, it protects you from others securing and using them, and it will ultimately improve your search-engine optimization. Then start leveraging these resources to build a fan base.
5. Hash a customer acquisition plan. Before you dive into a lengthy business plan, which more than likely will be obsolete before you even launch, focus on two questions:
"How do I get my first customer?"
"How do I get my n-th customer?"
You may have the best business plan in the world, but without customers, your business is nothing. Create a thoughtful customer-acquisition plan and marketing strategy and be prepared to explain it to investors, partners and stakeholders, as this will undoubtedly be the first questions they ask.
I was fortunate to recently be selected as part of the inaugural cohort in Startup.SC, a business incubator that focuses on scalable business ideas in South Carolina. All of the ideas are all in varying stages of development, but the primary criteria for the incubator was idea validation. Once validated through the steps above, it is much easier to proceed to the next steps.
Just remember, it is much easier to build a business around a demand than to build a demand around a business.

Source: http://www.entrepreneur.com/article/237455

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